Property, Plant and Equipment Accounting Policy

ExxonMobil uses the “successful efforts” method to account for its exploration and production activities. Under this method, costs are accumulated on a field-by-field basis. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. Exploratory well costs are carried as an asset when the well has found a sufficient quantity of reserves to justify its completion as a producing well and where ExxonMobil is making sufficient progress assessing the reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. Development costs, including costs of productive wells and development dry holes, are capitalized.

Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.

Exxon Mobil Corp.’s property, plant and equipment, cost increased from 2016 to 2017 and from 2017 to 2018.

Property, plant and equipment, at cost, less accumulated depreciation and depletion

Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.

Exxon Mobil Corp.’s property, plant and equipment, at cost, less accumulated depreciation and depletion increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.

As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.

Exxon Mobil Corp.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.

Estimated total useful life

Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors.

Exxon Mobil Corp.’s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 and from 2017 to 2018.

Estimated time elapsed since purchase

The approximate age in years of a company’s fixed assets. Useful for comparison purposes.

Exxon Mobil Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.

Estimated remaining life

Exxon Mobil Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 and from 2017 to 2018.

As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.

Exxon Mobil Corp.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.